“Please organize your enormous amount of papers, files and documents. Label what is important to keep, and toss the rest!”
A major priority of the financial planning process is to create a seamless transition at your death. To that end, each of us should create an estate plan with a will and several important ancillary documents. You should also consider another important and extremely considerate document: a Letter of Final Wishes. This can outline things such as the continued care of pets and the distribution of personal items that may have meaning to family members. Another task that your heirs will appreciate: organizing your paperwork. If you don’t take the time to do this, you will create unnecessary stress for those tasked with figuring out your paper life.
Many Americans accumulate a lot of paperwork, thinking it may be important one day. They keep it in various locations and formats. However, there’s probably just a fraction of the documents that are really important to you and your family. The rest is likely no longer necessary for tax reasons or any other purpose.
Although personal organization is hardly anyone’s top priority (or even a hobby!), keeping important documents and financial records organized and easily accessible is a great idea. It is very helpful to your family both now and after you pass away. For example, being an executor for an estate can mean a front row seat to the stress and complications that can result from disorganization or document overload. Organizing the information is a very considerate gift to your family.
Forbes’ article, “Be Considerate To Your Family And Clean Out Your Files,” offers some guidelines that might be helpful.
It’s best to create a structured plan first. There many resources that you can consult ( such as the IRS) for information about recommended retention periods for various types of documents. In addition, think about these questions:
- Are your records self-explanatory to your loved ones?
- Are all your records in one location and in a consistent format?
- Do you shred old and/or irrelevant paperwork?
- Do you archive your important documents in an organized way (digital archiving may be best)?
- Create and update a comprehensive summary of important information for your family.
- Inform appropriate people how to access your files.
Address your records now to decrease the strain on your family and your professional support team in the future.
Reference: Forbes (June 14, 2017) “Be Considerate To Your Family And Clean Out Your Files”